How Biometric Wallets and eMoney Ensure Nations Can Respond to Pandemics
By Bob Reid, CEO and Co-Founder of Everest
We live in unprecedented, fragile times, with conditions changing at a velocity our institutions are unequipped to manage. Governments worldwide must respond to a massive economic shift and simultaneously provide critical services to both businesses and citizens, yet lack the infrastructure to do so.
In the midst of the coronavirus outbreak and the dire need for an urgent fiscal injection into the American economy, the U.S. Congress passed a COVID-19 stimulus package and President Trump signed it into law. Such a mammoth and monumental package is likely to run into serious technical difficulties and ethical problems as it relates to distribution of funds, though, that could lead to colossal waste in government expenditures.
Delivering cash to citizens and loans to businesses is a cornerstone of any stimulus package. Yet governments have historically been limited to sending checks and hoping & praying users will spend the money and businesses will invest with low-cost capital, kickstarting supply and demand.
As the U.S. learned in 2008-09, over 50 percent of users hoarded their newly received checks, businesses did not invest, and the economy sputtered. Tools like loading debit cards are ineffective at inducing spending, costly, and riddled with ineffectiveness and corruption. Similarly, even the most advanced of governments have grappled with extending even basic services like medical care; the existing electronic medical record systems lack interoperability and face privacy and confidentiality challenges – all leading to disastrous effects in a pandemic.
The inability to deliver economic infusion of capital and to provide basic services at scale during a crisis stem from legacy architecture with centralized storage systems and inadequate privacy controls. The challenges these systems present can be overcome, however, with a digital identity solution that is attached to an account, document storage, and transactions that are integrated into the existing banking, health and retail organizations.
Toomas Hendrik Ilves, the former president of Estonia and current professor at Stanford University, explains about his home country, “All government services are operating fine during the coronavirus pandemic….. due to the fundamental infrastructure we previously built.”
Given the current situation many Americans find themselves in, the government needs delivery that ensures the policy objectives of stimulating supply and demand are met. Additionally, governing institutions must find a way to attach medical records, test results, and other health related services data and materials to one person, all while adhering to local regulatory and other requirements for transparency and accountability.
With inspiration and learnings from the seminal eGov solution in Estonia, we know that an ideal eGov platform includes several elements. First and foremost, it must have an identity system. Banking and government compliance is weighted greatly on this component. In fact, many banks won't consider partnering with companies that deal in financial transactions without the companies being able to demonstrate an effective system of correctly identifying users.
A digital identity is attached to an account, confirms user identity, and leverages biometrics to ensure de-duplication and account access. To create an account and show proof of identity, a user would ideally need government-issued documentation, such as government a driver’s license and/or passport, universal beneficial owner, articles of incorporation with officer registers. Additional types of documentation could include third party attestations (proof of address from utility company or banks).
Each user must be granted an account or wallet that is tied to the aforementioned verifiable identity, capable of holding, sending, receiving currency, storing documents, and being independent of any device. What's most important is that it should be accessible, even if the user does not have a smartphone or access to technology, because the user must have access to execute transactions, even at an offline site like a store that's cooperating.
The delivery system on which the transactions take place also has to be scalable, capable of performing hundreds of millions or billions of transactions per day, performing transactions in a few seconds for a minimal cost that is linked to the existing banking, health, and retail organizations. On such a transaction system, the authorizing entity could transact exchange of value.
Exchange of value in this kind of system is transacted digitally as e-money or anything programmable, like digital US dollars or eVouchers. Programming the vouchers, or whatever value is exchanged, should ideally be time-stamped (i.e. must spent in 30 days) and purpose-limited (i.e. can be spent on medical or food supplies), and even location-limited (i.e. must be spent in New York). This prevents users from hoarding the value they are given and instead forces them to spend it. In another example, loans to small businesses could be tied to payroll or capital expenditure. This voucher or programmable currency can be sent or received directly to users’ accounts, also known as the "eWallet," and can be settled over an automated clearing house (ACH).
To ensure that this infrastructure is running smoothly and according to plan, agencies are obligated to exchange data over a unique layer that connects them to one another, as well as to private sector players. This data exchange layer will include cryptographic access controls at a granular level to dictate who is allowed to share what data with whom, while adhering to the existing legal system and protecting users’ privacy, a critical tenet in this day and age.
So, how does this apply to In the case of delivering $1,000 to 120 million families across the United States?
Registration: Users would sign up for their U.S. eGov account online, on a tablet in a cooperating offline store, or on a mobile app. First, the user would take a selfie and a picture of his or her driver’s license, where the biometric technology matches the live user with the picture on the license, and extracts the data from the license. The user then only needs to input a few personal details, including a PIN. Once registered, the user would have an eGov wallet, which is hosted in the cloud. Should the user have an Android or iOS smartphone, he or she can manage multiple accounts, add documents, etc. In an event the user doesn’t have a device, then eVouchers, money, etc. can still be received and redeemed at an offline site.
Distribution: The government would send programmable eMoney or USD (eVouchers) worth $1,000 to all users who registered. These eVouchers would be time-bound, and must be spent within 30 days of receipt. Moreover, the eVouchers would only be redeemable for food or medicine, or only in select stores (i.e. grocery and pharmacies), and eVouchers would be automatically deposited in the user's eWallet regardless of ownership of a device or not. The transfer would happen in a matter of minutes or hours.
Redemption: Users who have a device will see a deposit in their eGov Wallet and can go to any participating store, and buy the approved goods and services. Those without a device can simply go to a participating store. Either type of user can check out by scanning his or her face and entering a PIN on the supplied tablet or clerk with a smartphone. Users with a smartphone can use NFC to check out on a traditional point-of-sale. The amount spent will be deducted from eVoucher balance. In doing so, the government is verifying that a user spent a certain amount on a number of goods and services, and none was lost to graft, hoarded or traded away.
Settlement: Stores that collect eVouchers will send them back to the “treasury” in exchange for the commensurate amount in US dollars. By integrating with an ACH and/or bank(s), the government can facilitate same day settlement. Since all transactions are cryptographically signed, and each user, clerk, anyone who touches eVouchers or money is biometrically verified, the platform ensures bad actors are identified quickly.
In the case, for example, of tracking test results, COVID19 health status, and vaccine dates, the ideal platform can be leveraged similarly.
The users' eGov Wallets would also store medical records, which, in the case of the coronavirus, would include vital information like if and when the user tested for COVID19, was vaccinated, etc. Medical practitioners would upload users’ results to the users’ respective eGov Wallets. All uploads would be biometrically-signed by practitioners and available to the user. Like the GDPR-compliance of the economic portion of the eWallet and distribution system, the medical portion, too, would have to be HIPPA-compliant. The documents are encrypted, distributed, and only accessible by the user.
In the event when a user wishes to enter an area or receive a specific service, the user will be asked to confirm status, medical record, dates, and the like to a security staff member. The user will then have the ability to share said medical data to receive the service or be granted entry. By scanning their face, entering a PIN, users will be able to confirm and or share medical data.
Most importantly, the entire procedure, including both the subsidy distribution and the must be performed in an incredibly secure way that protects privacy. Implementation of such a system without its due diligence could do more harm than good if it puts sensitive data at risk. The ideal platform would ensure that all information is securely organized with cryptographic safeguards against misuse.
Management of 21st century economies and societies, and the associated crisis, require tools and infrastructure that address the environment. Asking governments and policy makers to solve these new problems is akin to requiring “a man to wear still the coat which fitted him when a boy as civilized society to remain ever under the regimen of their barbarous ancestors." By supplying digital tools and infrastructure in the form of cloud accounts tied to biometrics, not only can a crisis be avoided and managed and mitigated, but economies and societies can flourish.
Bob Reid is the CEO and Co-Founder of Everest, the decentralized digital payments SaaS provider. Founded in 2017, Everest designed a solution to bring institutions or organizations lacking a transparent, decentralized, and digital ledger system into the 21st century digital economy. This is executed by providing the subjects of the institution with a digital identity, known as “EverID”, and a value exchange and storage mechanism called “EverWallet”. The institution’s exchange-of-value transactions are recorded to a massively scalable, and transparent digital ledger called “EverChain”. Previously, he was the General Manager of Licensing at BitTorrent, and VP of Strategy & Business Development at Neulion and DivX. Bob has also gone through two IPOs, two acquisitions and founded a startup based on two of his own patents.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.